Bridge by ROcq7NRA

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									                         MEASUREMENT,
                      THE BRIDGE BETWEEN
                         THE HARD AND
                           SOFT SIDES
                                                    Arthur M. Schneiderman




V     isit Milliken and Company, a
      1989 winner of the Malcolm
                                                 vice president of quality and pro-
                                                 ductivity improvement at Analog
                                                                                              Get the hard stuff right and much
                                                                                              of the soft staff will take care of
Baldrige National Quality Award,                 Devices, Inc.,2 I had also worked            itself.
and one of the things you will                   extensively in the development and
notice is the slogans on the walls.              deployment of nonfinancial per-
One in particular is eye-catching:               formance metrics3 and the use of the      In this article, several examples will
                                                 first balanced scorecard for their        be used on how quantitative mea-
  “The hard stuff is easy, the soft stuff        management.4 My view was, and to          sures stimulate positive behavioral
  is hard and the soft stuff is more             a great extent still is:                  changes in both individuals and
  important than the hard stuff.”
                                                                                           organizations. However, before
                                                                                           proceeding, some definitions are in
To an admitted hard-sider, this one                     EXECUTIVE SUMMARY
                                                                                           order.
seemed dead wrong.
                                                  Both process and organizational

   Several years earlier, I had devel-
                                                 learning can be measured by looking       DEFINITIONS
                                                 at the improvement half-life and its
oped the half-life metric as a driver                                                      Generally, when people talk about
                                                 rate of change.
of the improvement process.1 As                                                            the hard stuff, they are in the
                                                  These metrics can be used to draw       process view. Included here are
ARTHUR M. SCHNEIDERMAN is                        organizational and individual attention
                                                                                           process mapping, measures and
an independent consultant on process             to the need for better approaches to
management. From 1986 to 1993 he                                                           metrics, improvement methodolo-
                                                 process improvement.
was vice president of quality and                                                          gies, and tools.
productivity improvement at Analog                Most information at the boundary           In contrast, the soft stuff reflects
Devices, Inc. where he facilitated the           between hard and soft sides of            the people view and is more
Quality Steering Council and chaired             improvement is in the form of
the   Total    Quality    Management                                                       concerned with motivation, reward
                                                 language rather than numerical data.      and recognition, team dynamics,
Implementation Council. Schneiderman
has served on the Malcolm Baldrige                Management, logic, and analytic         and vision and mission..
National Quality Award as senior
                                                 practices can expand to provide tools        Although these definitions paint
examiner and the Conference Board’s
US Quality Council II. He is located in          for understanding this alpha-numeric      the two views as black and white,
Boxford, Massachusetts and can be                interface in terms of degrees of          they are simply different aspects of
reached at (978) 352-2031 or at                  freedom rather than simple true or        a total system for improvement.
art@schneiderman.com.                            false rigidities.


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                                                                                                           life? Research showed that it
MEASUREMENT PROCESS                AND                                                                      depended on process complexity,
ORGANIZATIONAL                                         For any given process the                            which in turn had two dimensions:
LEARNING                                                                                                     organizational
                                                       half-life is constant over a
                                                                                                             technical
If the process view of an organiza-                       significant range or
tion is taken, it is as the sum of a
number of interconnected processes.
                                                              improvement.                                 This dependency was captured in a
Each of these processes has cus-
                                                                                                           three-by-three matrix that had
tomers      and     suppliers.    The                                                                      half-life values ranging from one
customers have requirements, and                                                                           month for low organizational and
organizations strive to match the
                                                                                                           technical complexity processes to
                                                   K is the change in knowledge, t                        twenty-two months for high ones. 6
process       output      to     these
                                                   is the time interval, L is the rate of                       Associated with any given improve-
requirements.        Results metrics
                                                   learning, and F is the rate of                           ment process is its own half-life matrix.
measure how well the organization
                                                   forgetting. L-F can be called the net                    Pre-TQM, industrial engineers were
perform this.
                                                   rate of learning, which we always                        relied upon to design and improve our
   Internal to the process are a few
                                                   hope is positive.                                        processes. The workers job was to fol-
key variables that drive its output.
                                                      As process knowledge increases,                       low the standard operating procedures
In general, they are invisible to the
                                                   the gap between the processes‟                           (SOP) developed by these engineers.
processes‟ customers. Measurement
                                                   inherent capabilities and actual                         TQM empowered the process execu-
of these variables produces a set of
                                                   outputs will decrease. Inherent                          tors not only to follow the procedures,
process metrics. In mathematical                   capabilities represent the ultimate                      but also to spend a portion of their time
terms, results metrics are the depen-              limit the process can achieve with-                      improving them. This change in
dent variables and process metrics                 out significant capital investment.                      improvement process has led to a ten-
are the independent variables asso-                Consequently, any results metric                         fold reduction in improvement half-
ciated with a process.                             should also decrease, defined as a                       lives and commensurate increase in the
   Process knowledge is the set of                 measure of that gap. Therefore, the                      net rate of process learning.
tangible and intangible operating                  rate of change of a results metric is                        Transforming intangible into
procedures used to convert the                     a function of net process learning.                      tangible knowledge will greatly
inputs to outputs. If knowledge is                 Conversely, the rate of change of a
                                                                                                            reduce process forgetting while net-
constant (i.e. operating procedures                results metric is itself a measure of
                                                                                                            works and best practices databases
unchanging), and the process vari-                 net process learning.
                                                                                                            will accelerate problem solving.
ables are stable, then the output of                  A little over a decade ago, I dis-
                                                                                                                There does not appear to be an
the process will also be stable, sub-              covered that the use of total quality
                                                                                                            accepted definition of organiza-
ject only to statistically predictable             management (TQM) tools and
                                                                                                            tional learning. The following is
variability. This phenomenon is the                methods produced a constant rate of
                                                                                                            offered:
purview of statistical process                     improvement which I called the
control (SPC).                                     improvement half-life.5 For a typical
                                                                                                               Organizational learning is the
   Process improvement requires                    process,      the     half-life    for
                                                   improvement was nine months. This                           acquisition, application, and mas-
new knowledge that manifests itself
                                                   meant that the gap between current                          tery, of new tools and methods
in changed operating procedures.
                                                   performance and the ultimate                                that allow more rapid improve-
This change in knowledge is called
                                                   process capability could be cut in                          ment of those processes whose
learning. Note also that process
                                                   half in nine months. The remaining                          improvement is critical to the
knowledge can be lost. For
                                                   gap could be cut in half in an                              success of the organization.
example, undocumented procedures
that rest in volatile human memory                 additional nine months. Because the
can be lost when the process                       half-life is a measure of rate of
                                                                                                            In other words, the half-life is a
executors move on to other                         improvement, it is also a metric of
                                                                                                            results metric of the improvement
assignments.      This      loss    of             net process learning.
                                                                                                            process. As the improvement process
knowledge is called forgetting. This                   For any given process the half-                      itself is improved, we expect to see
can be expressed mathematically as:                life is constant over a significant                      half-lives decrease for a given level
            ΔK                                     range of improvement. What then                          of process complexity. The rate of
                LF                               determines the value of the half-
            Δt                                                                                              change of process half-life, at con-

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stant process complexity is a metric                                                                     “Turbo TQM,” assigns team mem-
of organizational (versus process)                    People’s time is not always                        bers on a half- or full-time basis.
learning. Mathematically, it can be                     the bottleneck in the                            This can significantly accelerate the
shown as:                                              improvement process.                              revolutions per month (RPM) of the
                                                      Often data collection is                           improvement cycle and lead to
             Lp  t½                                limited by the cycle time of                         effectively shorter half-lives. Note
              t                                          the process itself.
       Lo   ½ 
                                                                                                         that people‟s time is not always the
                                                                                                       bottleneck in the improvement
             t  complexity
                                                                                                         process. Often data collection is
Lp is the process learning metric,                                                                       limited by the cycle time of the
Lo is the organizational learning                                                                        process itself.
metric, and t½ is the process                                                                               The following section examines a
                                                   development of new ones are the
improvement half-life. Lo is in fact                                                                     real example in which a sustained
                                                   keys to organizational learning.
the half-life for the improvement                                                                        gap between actual and expected
                                                      Why does the half-life model
process itself.                                    work? Most applications of the                        half-life, combined with a bit of
   Consider for example, a real                    TQM improvement methodology                           interdivisional competition, was the
situation7 where an organization,                  rely on taking a large problem and                    key in turning a TQM skeptic into a
new to TQM, is working on                          breaking it up into smaller pieces.                   dedicated champion.
reducing late shipments in their                   Typically, the biggest piece will
order fulfillment process. The                     represent 30 to 50 percent of the
complexity of their process is such                entire problem, Once identified, the                  AN EXAMPLE
that we would expect a twelve-                     improvement team determines a                         In 1987, Analog Devices estab-
month half-life.                                   corrective action, implements it, and                 lished and openly published a set of
   However, being new to the TQM                   modifies the operating procedures,                    nonfinancial performance goals as
                                                   to reflect the improved process.                      part of its five-year strategic plan.9
improvement methodology, their
                                                      It then turns to the next biggest                  The half-life method, customer
initial half-life is forty months. As
                                                   piece, which will again represent                     input, and competitor analysis were
they master this methodology, the                  30-50 percent of the remaining
half-life drops continuously and                                                                         used to set these goals. The half-life
                                                   problem. This never-ending cycle
approaches the twelve-month level.                                                                       was also used to set intermediate
                                                   constantly works to close the gap
The half-life of their half-life curve                                                                   quarterly goals and to deploy these
                                                   between current performance and
                                                                                                         goals to each of our divisions as part
is nine months. Their Lo is nine                   ultimate process capability. If the
                                                                                                         of our annual planning process.
months and their eventual Lp will be               process is capable of satisfying
                                                                                                         Although a one-page summary that
twelve months. Once an organiza-                   customer requirements, then that
                                                   gap will also be narrowing. If it is                  combined these with the key
tion has mastered a given
                                                   not, then a new process must be                       financial goals was initially referred
improvement methodology, all new
                                                   designed which has the capability of                  to as the “Quarterly Performance
improvement efforts are expected to
                                                   meeting these requirements.                           Audit, “ it quickly became known as
start at close to the appropriate                                                                        the “Scorecard.”
                                                      As a rule of thumb, a team will
half-life for that process. This                                                                            At that time Analog had a highly
                                                   take three to five months to
model suggests that Lo will vary                                                                         decentralized organization and each
                                                   complete each improvement cycle.
significantly over time, as new                    Therefore, a roughly 40 percent                       division was left to determine on
paradigms are invented, embraced,                  improvement in four months                            their own how to achieve their
and mastered, by the organization.                 translates into a half-life of about                  scorecard goals. At most divisions,
   The toolsets that enable process                five months. A more complex                           a staff member was assigned
learning      vary     with    process             process has more and therefore                        responsibility for one of the metrics
complexity.8 For example, the 7-QC                 smaller pieces and takes more time                    on the scorecard.
tools, the 7-MP tools, and                         per cycle, hence a longer half-life.                     At our largest division, Joe, the
simulation modeling, span the range                   Improvement activities usually                     operations manager, was assigned
from low to high complexity.                       account for two to four hours per                     responsibility for the on-time
Mastery of existing toolsets and the               week of team activity. To accelerate                  delivery metric.
                                                   the rate, Carrier Corporation‟s

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   As my office was located at that                                              EXHIBIT 1
facility, and my boss (the COO)                                                  Late Shipments by Division*

was acting general manager, I was
asked to sit in on all of the staff                                                                DIV A        DIV B            DIV C           DIV D         DIV E    Corporate




                                                    Monthly Perc ent of Lines Shipped Late
                                                                                             100
meetings. Joe was a very proud and,
to some extent, autocratic manager.
His initial reaction to a very
aggressive improvement goal was
“if that level of performance could
be achieved, we would already be                                                             10
there ... it just can‟t be done.” Over
time, the division‟s performance did
not improve. My help was declined.
Pressure mounted and everyone was
frustrated, from the CEO down.                                                                1
   One of the displays that I used to                                                               14            14               N/S           N/S            N/A        34
track performance against plan was                                                                                             Half-life (months)
                                                                                                    *See reference 3
the chart shown in Exhibit 1.10 I
posted this chart on the door to my                Joe held in his staff meeting                                                           able, and suggested alternative
office. If a division had elected to               conference room, Joe took his                                                           solutions. Often in putting the case
use TQM to improve their delivery,                 normal seat at the head of the table.                                                   together, the team would see the
I also posted the starting date and a              Needless to say the team meeting                                                        situation more clearly and reach
Pareto Chart (rank ordered bar                     took on the tone of a staff meeting.                                                    consensus on its own.
chart) of causes of lateness as                    Several of the participants said                                                            Analog Devices practiced a
identified by their QIP (Quality                   nothing during the whole meeting.                                                       flavor of a seven-step improvement
Improvement Process) team. After a                 With a little coaching, the next                                                        method used widely in Japan.11 The
few months, it became apparent that                meeting was in a different room and                                                     last step, step seven, is called
those divisions that were using QIP                Joe made sure that he sat at the                                                        “reflection.” Here the team reflects
teams were improving while the                     middle of the table. Several months                                                     on its team experiences, prepares for
others were not. People would come                                                                                                         its     management       presentation
                                                   later, Joe turned over the team
by my office and look at the charts                                                                                                        (reward and recognition), and plans
                                                   leader position to his manager of
on a regular basis.                                                                                                                        for is next improvement cycle. In
                                                   production planning and changed
   One night, Joe passed my office                                                                                                         reflecting, the team addresses the
                                                   his role to team sponsor.
                                                                                                                                           questions, “What went well?” and
on his way out, returned, and came                     There were many occasions in
                                                                                                                                           “What were our major weak-
in. He looked at the charts and then               which      finger    pointing    was
                                                                                                                                           nesses?”
turned to me and said, “Art, I think               redirected to data collection and                                                           Typical answers to the first
you‟re calling me a bad manager.”                  analysis. As the team became more                                                       question might be, “Everyone
Two hours later Joe agreed to start a              familiar with the TQM tools and                                                         participated,” “Everyone met his or
QIP team and I agreed to be its                    methodologies, behaviors changed.                                                       her commitments,” and “Larry
facilitator. Confronted with data                  Knowing that hip-shooting would                                                         pitched in to help Sue when she was
that showed other similar divisions                no longer work, team members                                                            out sick.” Identified weaknesses
were achieving results using TQM,                  brought data to meetings in support                                                     might include, “We spent too long
Joe‟s skepticism softened.                         of their positions.                                                                     collecting data,” “We didn‟t always
   As team facilitator, I did have to                  Functional issues were resolved                                                     end our meetings with clear action
overcome many soft issues. For                     using an “elevation process.” If the                                                    items,” “I wish we had someone
example, the team consisted of Joe                 team could not resolve the issue on                                                     from accounting on the team.”
(as the team leader, of course) and                its own, a case was put together that                                                       Too often, these types of
included several of his direct                     described the issue, provided                                                           evaluations are done in an open loop
reports. At our first meeting, which               whatever relevant data was avail-                                                       fashion. Individual performance

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appraisals rarely start with the pre-
                                                                                                               Sean: “OK, Joe, how are you
vious cycle‟s findings and next
                                                                                                               doing it. Stretching the lead
steps. Our teams were encouraged,                      It is the hard stuff that                               times? Building inventory?”
as part of their training, to review                  solves problems; the soft
their previous reflections at both the                  stuff is an important                                  Joe: “No, no ... This QIP stuff
                                                                                                               really works.”
start and end of each improvement                               enabler.
cycle. By reviewing them at the
beginning, they could plan steps to                                                                      The following week, Sean called to
address their identified weaknesses;                                                                     ask if I could drop by on my next
at the end, they could see how well                                                                      visit. By the way, they are
they did. In this way, the reflection              (CEO) and Tom Malone (president)                      represented in Exhibit 1 as divisions
step became closed-loop. This                      attend every rally, and give out the                  A and B.
closure greatly enhanced the teams                                                                          A few years later, management
                                                   prizes at their conclusion.
learning.                                                                                                decided, for very complex reasons,
                                                      While the QC Circle conferences
                                                                                                         to set a flat annual goal. Joe came to
   This self-diagnosis is included in              have perhaps an 80/20 focus on                        my office for an explanation. He
the     teams‟     presentations    to             learning versus celebrating, the                      said, “Art, with no improvement
management, which addresses each                   sharing rallies have the converse.                    goal, I don‟t have any job.” The
of the seven steps. The collective                 Which is right? That depends on the                   greatest champions are converted
experience of the QIP teams                        current needs of the organization, a                  skeptics, and in this case, it all
provides the fact base that                        very important soft-side decision.                    started with data.
management can use, for example,                   Here again, data from the team
in setting priorities in TQM training              reflections and employee surveys                      FUZZY LOGIC
(e.g. expanding training in data                   can provide the basis for the                         Success is like a giant magnet. It
collection and analysis or adding a                decision.                                             draws people from all corners of the
module on meeting management).                                                                           organization, some of whom have
                                                                                                         made little or no contribution to that
   Analog Devices held periodic                    Solution Versus Enabler
corporate wide and divisional “QIP                                                                       success. At the first sign of trouble
                                                   This example shows that the soft                      they are the ones who declare that
Fests” where teams joined together                 stuff can emerge as countermea-                       they have the solution. This
to celebrate their success and share               sures to real problems teams                          happened at Analog when several
their experiences. In designing these              experience in doing the hard stuff. It                unrelated situations in 1989
conferences, two different models                  is the hard stuff that solves                         triggered a reversal in performance
were examined.                                     problems; the soft stuff is an                        at nearly all divisions. Delivery
                                                   important enabler. Too often, the                     started to get worse.
QC Circles and Sharing                             soft stuff is approached as an end in                     A newly hired corporate support
Rallies                                            itself. Consequently, it does not                     staff manager took the position that
In Japan, there are almost daily QC                contribute to accelerated learning                    our setback was the result of a lack
Circle conferences held in various                                                                       of company vision and mission
                                                   and      improved      organizational
                                                                                                         statements, too many teams, and the
parts of the country. Teams give                   performance.
                                                                                                         need for facilitator and teamwork
very structured and standardized                      As an epilogue to this example,
                                                                                                         training. When asked for data to
fifteen-minute Presentations, the                  Joe‟s division became the most                        support her position, she answered
main objective of which is to share                rapidly improving division at                         “I don‟t need data, this is my area of
best practices in the use or the                   Analog. In fact, they were right on                   expertise.”
seven-step improvement methodol-                   their annual half-life based goal                         Since Analog was still in the
ogy.                                               line. Standing at the bar at one of                   early stages of its quality journey,
    At Milliken & Company, they                    the     company‟s      manufacturing                  confusion over what to do next ran
have been holding quarterly                        council meetings, I overheard the                     rampant. In my view, following her
“sharing rallies” for fifteen years.               following conversation between Joe                    recommendations would violate the
Teams are allowed five minutes for                 and Sean, his counterpart at a sister                 very principles that the company
their    presentations    and    the               division that had made a quick start                  was trying to inculcate in the
participants get to vote on the                    but had plateaued for the past                        organization; Analog would be
“best” presentation. Roger Milliken                several months:                                       leaping from problem to solution

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without     collecting data       and
                                                             EXHIBIT 2
identifying the root cause. To act on
                                                            Example of Survey Res ults
her advice would be setting the
worst possible example.
                                                                                                     Progress to Date
   On the other hand, I did not
                                                                                                                                                 unweighted
know the answer either. It was only                                                                                                              weighted
several years later, when Sterman,
Reppening, and Kofman built a
System Dynamics based computer




                                                   Division
simulation model of the Analog
Devices experience, that I was able
to see through the complexity of the
situation and understand the real

                                                   Corporat e Wide
root causes.12 (Their findings are
discussed later in this article.)
   What I chose to do was to go to
those people in the organization
who should have the best
knowledge of the situation: the                                      0         1                      2                 3                 4                 5
division general managers.                                                   wors e                       neutral                       better
   I constructed a survey that had a                   What have we done well?                                   What have we done poorly?
mix of questions some of which                         “…selected one thing to focus on:                         “…have not culturally ingrained the
could be answered on a quantitative                    on-time delivery, and achieved a                          QIP philosophy”…“we haven’t built
                                                       meaningful win…”                                          excitement among the GM’s”…“we
scale (0 to 5) and others in words.                                                                              don’t have enough QIP leaders in
Questions included the following:                                                                                the division staff…”
                                                            “…identified clear priorities, established            “…divisions really don’t understand
    How do you rate overall QIP                            the metrics, and kept them very visible
                                                            … (this) has led to GM buy-in to QIP…”
                                                                                                                  how customer’s needs have
                                                                                                                  changed…”
progress to date?
                                                            “…very rapid and broad acceptance
    What have we done well?                                of QIP…”                                             “…failed to define QIP. We think QIP is
                                                                                                                 QIP teams, it’s a subset of TQC, but
    What have we done poorly?
                                                                                                                 you’re now telling me that it’s the same
                                                                                                                 as TQC. That was never explained to us…”
     What problems should we
anticipate?                                       anonymity, but nearly all declined.                              numerical data did not dig deeply

                                                 Detailed notes were taken and all                                enough, while the quotes provided
      How     do     you           rate           quotes were confirmed.                                           context, but as language data, could
understanding of QIP at           your                                                                             not be analyzed ... or could they?
                                                     The results were presented in a
division? Company wide?                                                                                                  In 1965, Lofti Zadeh “invented”
                                                  written report to the corporatewide
     How valuable have            the            QIP Council. Exhibit 2 is a typical                          a new approach for analyzing complex
                                                                                                               systems called “fuzzy logic.” The science
following been in driving QIP?                    excerpt taken from that report. The
                                                                                                               of fuzzy logic legitimizes the modeling of
                                                  chart shows the GM‟s perception of
    Half-life concept                                                                                         systems where truth takes on degrees and
                                                  the total company as well as their
    Scorecard                                                                                                 information can be in linguistic form.
                                                  division‟s progress to date. Also                            Although Zadeh is credited with the
    General Manager Council
                                                  shown        are     the     division                        invention of fuzzy logic, many
     meeting updates
                                                  revenue-weighted average and the                             applications predate his discovery.
    Bonus adder (based on nonfi-
                                                  range of responses (double-ended                             System Dynamics, the basis of systems
     nancial metrics)                                                                                          thinking, is a form of fuzzy logic that had
                                                  arrows). The quotes were used to
    Others                                                                                                    its origins in the work of Jay Forester in
                                                  add further depth of meaning to the
                                                                                                               the 1950‟s.13 Also, in that period, Jiro
                                                  data. The results of this traditional
   Each survey was conducted on a                                                                              Kawakita invented the K-J method for the
                                                  part of the survey proved interesting
one-on-one basis. They ranged from                                                                             analysis of language data.14
                                                  but lacked sufficient detail to                                     A short while after the survey
forty-five (45) to ninety (90)
                                                  produce actionable next steps and                                was completed, I had the
minutes. The GMs were offered
                                                  priorities. The problem was that the                             opportunity to extensively apply and
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  EXHIBIT 3
  A Re sult From the General Managers Survey

                                           M E A S U R E M E N T ,     T H E      B R I D G E    B E T W E E N      T H E   H A R D   A N D     S O F T   S I D E S
QIP Improvement Opportunities
                                                                      Performance                                                       performance on something deemed
                                             poor                            ok                        excellent                        noncritical and are candidates for
                                         vital                                                                                          reevaluation of allocated resources.
                                                                        7                                                                  The most important area is that
                                                         9                                      Maintain
                                                                                                                                        above the maintain band. These
      Criticality to QIP Success


                                                        Improve                                                                         represent areas viewed by the GMs
                                                                         8                                                              as critical to success but performing
                                                                                                                                        below what they believed was
                                                                        2                                                               required. Using distance from the
                                   important
                                                                        3                                                               band as a numerical measure of
                                                                  1                                                                     need      for    improvement,     the
                                                                                                                                        following list can be created:
                                                                                         Re-evaluate

                                                      Maintain
                                                                                                unweighted                                    Area                    Points
                                   irrelevant                                                   weighted
                                                                                                                                              Corporate QIP
                                                1. CEO's Staff          4.     *    8. Corp QIP function                                      training                  60
                                                2. Corp QIP Council     5.     *    9. Corp QIP training
                                                3. Div QIP Council      6.     *                                                              The General Managers      25
                                                                        7.     GM's                                                           The Corporate QIP
                                                                                                                                              function                  15
teach the method under the tutelage                                               As another example of the use of
                                                                                                                                              Total                    100
of Professor Shoji Shiba. 15 Using                                             fuzzy logic, consider the last item in
the K-J Method with the language                                               the interview: QIP improvement
data contained in the quotations in                                            opportunities, shown in Exhibit 3.
                                                                               This matrix provided a format for                        This list represents the fuzzy logic
Exhibit 2, several clear hidden
                                                                               evaluating the importance versus                         consensus view of the GMs as to
messages emerge. Although we had
                                                                               performance for several groups and                       where improvements were most
done a good job in our tactics
                                                                               individuals (items 4, 5, and 6 with                      needed in the QIP infrastructure.
(goals, metrics, focus on the vital
                                                                               names removed to protect them)                           The point scores provide an
few), we had failed to create a sense
                                                                               thought to be critical to the success                    indication of the emphasis (i.e.,
of urgency based on a compelling
business need for change and had                                               of Analog‟s QIP efforts.                                 resources) that should be directed
                                                                                  The intent was to identify                            toward each area. As far as next
not clearly linked our metrics to this
                                                                               responsibility    for    determining                     steps, the bottom line was clear: we
need.         Furthermore,        our
                                                                               corrective actions for our current                       desperately needed training in tools
self-diagnosis process had failed to
                                                                               situation. It was not for assessing                      and methods. There was little
uncover several weaknesses in our
                                                                               blame. Each GM was asked to place                        mention of training needs on the
organizational     change    system,
                                                                               the identification number at the                         soft stuff. The GM‟s also
including training and education
                                                                               appropriate location on the matrix.                      recognized that they were not doing
and company-wide diffusion.
                                                                                  Exhibit 3 is the result of                            all that was necessary and that the
   Ideally, the corporate QIP
                                                                               averaging these locations for each                       Corporate QIP function was not
council would have collected and
                                                                               of the identification numbers. The                       providing them with enough
analyzed language data around the
                                                                               solid points represent a straight                        support.
issue or theme, “What are the
                                                                               average, while the open points                              The report to the Corporate QIP
weaknesses in our implementation
                                                                               represent the division revenue                           Council omitted the results for the
of TQM?” With the importance
                                                                               weighted average. Points lying                           three individuals (items 4, 5, and 6).
weighted list of answers, we could
                                                                               within the band labeled maintain”                        These data were communicated only
have proceeded to identify and rank
                                                                               reflect performance commensurate                         to them. It proved extremely
appropriate corrective actions and
                                                                               with their criticality to the QIP                        valuable in highlighting issues
been better able to communicate
                                                                               process. Points below this band
their rational.
                                                                               would be indicative of high
regarding their roles in advancing                                                Should sensitive surveys like this                    The K-J Method is an excellent
us on our TQM journey, and made                                                be done internally or by outside                         team tool and yields a consensus
visible conflicts of these roles with                                          consultants? They should be done                         rather than individual view. There is
their own personal management                                                  by an internal team (in Analog‟s                         a role for an outside facilitator in
styles and agendas.                                                            case, the Corporate QIP Council).                        guiding the process, but ownership

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                M E A S U R E M E N T ,   T H E     B R I D G E    B E T W E E N     T H E   H A R D   A N D   S O F T   S I D E S

of the conclusions must lie with the              measurement of process and
team driving the change.                          organizational learning and how                          S. Kaplan, "Companies as Laboratories' " The
                                                                                                           Relevance of a Decade, Paula Barker Duffy
                                                  measurement of the first, using the                      (ed.) (Boston: Harvard Business School Press,
The Trap                                          half-life method can encourage                           1994): 179-182.
                                                                                                         5 Schneiderman, "Setting Quality Goals."
Returning to the research done by                 changes in individual behavior. Can                    6 Arthur M. Schneiderman, "Are there Limits to
Sterman, Repenning, and Kofman,                   traditional concepts be used to                          Total Quality Management?" Strategy &
                                                                                                           Business (Issue 11, Second Quarter 1998): 35-
their work demonstrated that the                  prove that the half-life metric is                       45.
longer improvement half-lives for                 directly related to learning? No, it                   7 Schneiderman, "Metrics for the Order Ful-
                                                  must be justified using fuzzy logic.                     fillment Process:' (Part 2, Exhibit 3).
the more complex revenue-                                                                                8 Schneiderman, "Are there Limits to Total
generating processes (e.g. product                   The second deals with a complex                       Quality Management?"
                                                  situation in which our traditional                     9 Ray Stata, "Organizational Learning-The Key
development and sales), coupled                                                                            to     Management        Innovation,"      Sloan
with severe downturn in the                       recourse is to opinion rather than                       Management Review (Spring 1989 63-74).
                                                  fact. In these situations, data can be                 10 Schneiderman, "Metrics for the Order
semiconductor business          cycle,                                                                     Fulfillment Process:' (Part 2, Exhibit 3).
meant that productivity increased                 collected and analyzed, but because                    11 Hitoshi Kume, Statistical Methods for
                                                  most of it is in the form of                             Quality Improvement (The Association for
much faster than volume.                                                                                   Overseas Technical Scholarship (AOTS)
   With immense pressure created                  language, fuzzy analysis is required.                    1985).
by a dangerously low stock price                  Fortunately, tools exist for this                      12 Sterman, J., N. Repenning, and F. Kofman
                                                                                                           "Unanticipated Side Effects of Successful
(felt throughout the industry) and                analysis, although they are not                          Quality Programs: Exploring a Paradox of
the resulting high labor variances                widely understood. These tools                           Organizational Improvement," Management
                                                                                                           Science.
caused by successful productivity                 include the seven management and                       13 Jay W. Forrester, "Industrial Dynamics: A
improvement, Analog succumbed                     planning tools17 and simulation                          Major Breakthrough for Decision Makers,"
                                                  modeling.                                                Harvard Business Review (July-August,
and had its first ever company-wide                                                                        1958).
layoff. This triggered the age-old                   Finally, my last visit to Milliken                  14 Jiro Kawakita, The Original KJ Method
                                                  & Company was as a guest at an in-                       (Kawakita Institute, Tokyo).
fear that improvement leads to job                                                                       15 Shoji Shiba, Alan Graham, and David
loss. We fell right into the trap that            house training course. I noticed that                    Walden, A New American TQM (Cambridge
                                                  there were a lot more courses and a                      MA: Productivity Press, 1993).
Deming foresaw and created fear in                                                                       16 W. Edwards Deming, Out of Crisis (MIT
                                                  lot more talk about the hard stuff.                      Center for Advanced Engineering Study,
the workplace and a subsequent
                                                  At dinner, I asked Tom Malone                            1982).
suspension of effective improve-                                                                         17 See for example, Michael Brassard, The
                                                  (Milliken‟s president) whether they
ment activities.16                                                                                         Memory jogger Plus+ (Methuen, MA:
   What should we have done? The                  were becoming hard-siders. His                           GOAL/QPC, 1989).

model suggests that a greater focus               answer:
on improvement of revenue
generating processes could have          “Well, „the hard stuff is easy, the
grown volume to fully utilize a          soft stuff is hard,‟ but the hard
more productive workforce. It also       stuff‟s important, too.” :
                                                  Reprinted from
        Journal of Strategic Performance Measurement, April/May 1998,
suggested that Analog might have                                                                               Volume 2, Number 2
been too aggressive in cutting         Notes
prices, which exacerbated the
situation. Their findings are not
without controversy within Analog.     1 Arthur M. Schneiderman, "Setting Quality
                                                    Goals," Quality Progress (April 1988): 51-57.
                                                  2 Analog Devices is a mid-sized semiconductor
CONCLUSION                                          manufacturer.
                                                  3 Arthur M. Schneiderman, "Metrics for the
This article has addressed two                      Order Fulfillment Process," Journal of Cost
related issues that reside in the                   Management (Part 1: Summer 1996): 30-42,
                                                    (Part 2: Fall 1996): 6-17.
space we have created for ourselves               4 Robert S. Kaplan, Analog Devices: The Half-
between the hard stuff and the soft                 Life System (Boston, MA: Harvard Business
                                                    School, 1989) Case #9-190-061; and Robert
stuff. The first deals with the




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